With inflation affecting Americans significantly over the past year, the Internal Revenue Service (IRS) has responded by increasing retirement contribution limits for 2024. This article provides all the details you need to maximize your retirement savings under the new IRS guidelines.
Increased Individual Retirement Account Contribution Limits
Starting in 2024, the IRS has raised the annual contribution limit for Individual Retirement Accounts (IRAs) from $6,500 to $7,000. For those aged 50 and older, the 'catch-up' contribution limit remains an additional $1,000, allowing for a total contribution of up to $8,000 annually.
New Roth IRA Income Limits
The Adjusted Gross Income (AGI) phaseout range for Roth IRA eligibility is also increasing:
Single individuals and heads of households: $146,000 to $161,000 (up from $138,000 to $153,000 in 2023)
Married couples filing jointly: $230,000 to $240,000 (up from $218,000 to $228,000 in 2023)
These limits apply to both Traditional and Roth IRAs, offering more flexibility for higher-income earners to contribute.
Boosted 401(k) Contribution Limits
For 2024, the contribution limit for 401(k) plans will rise to $23,000, up from $22,500 in 2023. The 'catch-up' contribution for individuals aged 50 and older will remain at $7,500, making it possible to contribute up to $30,500 annually if you qualify.
These increased limits also extend to other retirement plans, including:
For more detailed strategies on maximizing your 401(k) or TSP contributions, check out our other articles on retirement planning.
Why These Increases Matter
While these new limits may not entirely offset the impact of inflation, they play a crucial role in helping Americans save for retirement and reduce their tax burden. By taking full advantage of these increased limits, you can enhance your retirement savings potential and secure a more financially stable future.
2024 Retirement Contribution Limits Key Takeaways
IRA Contribution Limits: Increased to $7,000 for 2024, with an $8,000 limit for those over 50.
Roth IRA Income Limits: Phaseout ranges increased to $146,000 - $161,000 for singles and $230,000 - $240,000 for couples.
401(k) Contribution Limits: Increased to $23,000, with a $7,500 catch-up contribution for those over 50.
Other Plans: New limits apply to 403(b) plans, TSP, and most 457 plans.
Ensure you take full advantage of these opportunities to maximize your retirement savings and benefit from the increased contribution limits. For further insights and strategies, explore our extensive library of retirement planning resources.
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